Phila. health-care costs stabilize somewhat, next year a different story

Philadelphia companies and workers saw the lowest health-care cost increases in more six years in 2012, with an average health-care plan rate increase of 4.9 percent — down from 6.6 percent in 2011 and 9 percent in 2010.

That was consistent with the national average of 4.9 percent, according to a report released Wednesday by benefits consulting firm Aon Hewitt

That’s the good news.

The bad news, according to the report, is Philadelphia has the highest health plan cost-per-employee in the country.

The average health plan cost-per-employee for major companies in Philadelphia is expected to rise to $13,716 next year from $12,898 this year. Total health-care costs for employees at those companies, including employee contributions and out-of-pocket costs, are projected to be $3,661 in 2013, up 9 percent from $3,352 in 2012, according to the report.

Aon Hewitt is forecasting a 6.3 percent average rate increase for health coverage in Philadelphia in 2013, which again mirrors the national average.

Tim Nimmer, chief health actuary at Aon Hewitt, attributed the stabilizing trend in rates nationally in 2012 to employers taking “more aggressive actions” with their benefit plans back in 2010 to cope with declining revenue. Those actions included a general shift to consumer-directed health plans. Declining employment levels also contributed to lower costs, he said.

“Most employers want to continue to offer benefits, but face financial pressure to achieve a meaningfully different cost outcome,” said Jim Winkler, chief innovation officer for health and benefits at Aon Hewitt. “Employers will either need to more aggressively manage traditional programs by finding ways to reduce demand for health care and reforming the provider system or move in the other direction — towards a defined-contribution approach that places accountability on individual employees.”